Section 6 - Amendment of section 48 - Direct Tax Laws (Second Amendment) Act, 1989

6. Amendment of section 48. In section 48 of the Income-tax Act, in sub-section (1), to clause (a), the following proviso and the Explanation thereto shall be added, namely :- Provided that in the case of an assessee, who is a non-resident Indian, capital gains arising from the transfer of a capital asset being shares in, or debentures of, an Indian company shall be computed by converting the cost of acquisition, expenditure incurred wholly and exclusively in connection with such transfer and the full value of the consideration received or accruing as a result of the transfer of the capital asset into the same foreign currency as was initially utilised in the purchase of the shares or debentures, and the capital gains so computed in such foreign currency shall be reconverted into Indian currency, so however, that the aforesaid manner of computation of capital gains shall be applicable in respect of capital gains accruing or arising from every re-investment thereafter in, and sale of, shares in, or debentures of, an Indian company. Explanation .- For the purposes of this clause,- (i) non-resident Indian shall have the same meaning as in clause (e) of section 115C; (ii) foreign currency and Indian currency shall have the meanings respectively assigned to them in section 2 of the Foreign Exchange Regulation Act, 1973 (46 of 1973); (iii) the conversion of Indian currency into foreign currency and the reconversion of foreign currency into Indian currency shall be at the rate of exchange prescribed in this behalf. .